Nice Earnings: Shares Up 9% on Cloud Growth and Optimism Over AI; Still Undervalued
We’re maintaining our $265 fair value estimate for narrow-moat Nice after incorporating third-quarter results and the LiveVox acquisition. Shares jumped 9% on peer-leading cloud growth of 22% and good indications that Nice’s artificial intelligence offerings are gaining traction with customers. Furthermore, 2023 guidance was raised modestly and an initial outlook for 2024 was provided, which likely soothed investor concerns given recent uncertainty over AI and a weaker market for small and mid-size customers. Despite the positive price reaction, we continue to think the shares look undervalued.